Understanding Capitalism

According to Merriam Webster, the definition of capitalism is a way of organizing an economy so that the things that are used to make and transport products (such as land, oil, factories, ships, etc.) are owned by individual people and companies rather than by the government. It clearly shows us that capitalism is the opposite of marxism a.k.a communism. In the capitalism system, individual role is really important. The government doesn’t control every aspect of the state's affair, they're observing the interests of each classes and how they work, they create a stable system of law that applies to all capitalists, a national currency and customs system. 

Capitalism nowadays is the social system that is used by almost all countries in the world. There are classes in capitalism in which the majority of them have to work to earn the wage, we called it working class. They have to produce stuff and the capitalist class is going to sell them to make profit. Capitalist class is living off profit the working class made.  We can say that those two classes are exists and mutual, it’s a reflection of the society we live in nowadays.

The main interest of capitalist class is to make profit. They intend to make themselves as rich as they could, because it’s all about individual wealth. But we couldn’t mistake it as slavery because the working class is getting a proper wage and after all, capitalism makes man become virtuous, appreciates their rights as a man, and it could bring many people out of poverty.

Irena Natasya-1701299185

Credit: http://www.worldsocialism.org/articles/what_is_capitalism.php

           : http://capitalismis.com/

        

Capitalism and Crisis

Capitalism created to help companies promote the company. In addition, this system also provides the opportunity for the public to take part in the company, joined the company, and take profit from it. That opportunity can be accomplished by purchasing shares of company. Capitalism is a system of production and distribution of goods and services in return for what is paid by the consumer.

Initially, this system is running smoothly. But over time, the capitalism is the way for the rich to add his wealth. Since then the country could be used as a business instrument.

Capitalism can eventually lead to a global crisis, the existence of unstable financial and monetary. Economic development sustained by the growth of the real sector. Worse than that, this can affect a deeper crisis, which is the fall in wages and more unemployment. So in the end, lead to chaos as banks collapse, the government uses public funds to bailout banks, people lose jobs, social services budget get cut, the rising prices of food and groceries. Because of this, the capitalist system does not make the world economy safe and puts the world in a dangerous position and guard against crises that may occur anytime. 

Susi Wansaga - 1701315251

Are we really "FREE" ?

In 1945, Bung Karno said that we have our independent. But, is that a real independence now? I don’t think so. As a peripheral state like Immanuel Wallerstein stated in his Modern World System Theory, we are dominated by the core states. They buy our raw material as cheap as possible and then process it into commodities that we need and sell to us in an expensive price.(Balaam & Dillman, 2014) Do you realize that, that is the actual colonization.

But maybe, we couldn’t run away from the reality that we need them because we don’t have any sufficient technology to process all that raw material. Why we as the peripheral states feel being exploited by them while we still need help from the superpower states? Yes, we still need them but I think, there are many people out there who enrich themselves so we are exploited not just by the core states but also buy our people too.

There is also another reason, why we couldn’t avoid them. We live in liberalism world now which we need to depend in others because we can’t fulfill our needs by ourselves. Besides, core states are fewer than the peripheral. So, we don’t have any flexibility in choosing because when we don’t want to give our resources, they could choose other states.

Besides our raw material, do you realize that our culture also being exploited now? Tell me, how many of your friends know the name of traditional house or clothes? All we know is LV, Guess, Esprit and others branded things. Do you know that Nike’s shoes are made in Indonesian with cheap budget and how much do you spend your money just to buy those shoes. Many of Indonesian products also have high quality why don’t we try to buy that? Do you still wanna be a prisoner ?  

Source : Balaam, D. N., & Dillman, B. (2014). Wealth and Power: The Mercantilist Perspective. In Introduction to International Political Economy (pp. 120-122). Harlow: Pearson Education Limited.

Gisela Bianca - 1701306070

OELs or HILs ?

The International Political Economic is influenced by those groups of people. Orthodox Economic Liberals (OELs) group emphasize that market doesn’t need states and Heterodox Interventionist Liberals (HILs) group prefer state intervention in the market. These two groups have their own proposal which have the advantages and also the flaws. Indonesia as a developing country, I think that HILs policy will fit best with our situation today.

As Balaam said, OELs is a group of people who cling to economic liberal ideas, values, and policy prescription. They support that an open and free market could determine socio-political outcomes. OELs suggest that the government support on banks, infrastructure project and social welfare programs should be limited. They wish that state doesn’t regulate of many parts of the economy. They also offer an idea to stimulate the economic growth, the government should cut taxes.

Increasing government spending as long as it creates more jobs is better than just worrying about the inflation. Developing countries need new technology and many kind of way to higher their standard of living. Therefore, the government should invest more in, such as infrastructure, education, healthcare, etc. Banks also need government help to regulate about the derivatives, deposit requirement, pay and bonuses. HILs agree with the globalization but they prefer to manage it than foster it without purposes. (Ballam & Dillman, 2014)

Because of those proposoal from each group, I think Indonesia will prefer the HILs because HILs give more advantages to us. Such as, they suggest that developed country should help developing country. Even Indonesia has been one of the developing country that has a good economic condition but we still need help from HILs to assist us in adopting free market because in here there are many domestic company which is defeated by the international product. So, what do you think? Do you prefer HILs also like I do?

Gisela Bianca - 1701306070

Source : Ballam, D. N., & Dillman, B. (2014). "Laissez-Faire": The Economic Liberal Perspective. In D. N. Ballam, & B. Dillman, Introduction to International Political Economy (pp. 73-76). Harlow: Pearson Education Limited.

The Birthplace of Industrial Revolution

We live in a modern world today, when the technology is developed well and make our life easier. We can make everything in a short time, thanks to technology. But do you know when exactly the technology was invented? It was invented around 18^th to 19^th century in Britain. We called it, the Golden Age.

Golden age in Britain means a great revolution began here, an industrial revolution that change the world. Before the golden age came, people lives in rural communities. They did almost everything with hand tools or traditional machine. Then, there were iron and coal ore which start it all. When the Britain start their revolution by built many factories with special-purpose machinery, mss production, industrialization, and it surely brought many goods to all the people. Standard of living for some people was improved and it marks Britain as the pioneer where the great revolution began.

There are some things that were born from the revolution. First is from the textile industry was in 1764, James Hargreaves, an Englishman, invented the Spinning Jenny. It was a machine that could produce more with less human energy. Then, the spinning jenny was improved upon by British inventor Samuel Compton. The second is the steaming machine which was invented on 1792 by an Englishman, Thoman Newcomen.

That were only two example but if I could add more, there were improvement in transportation, building, banking, and communication. There’s so much things invented in Golden Age that change the world which we live today. 

Credit: http://www.history.com/topics/industrial-revolution

           : http://www.bbc.co.uk/history/0/20979973

           : http://industryandchange.files.wordpress.com/2009/01/industrial-revolution-1.gif

Irena Natasya-1701299185

The Impacts of Golden Age to The World Economy

The golden age is a time of great prosperity, learning, advances in thought, technology, art, literature, science and research. It is also usually a time of peace, though victorious wars are often part and parcel of a Golden Age. During the Golden Age, there is a gold standard which is a monetary system that defines the dollar as a fixed weight of gold. In practice, that means you may present dollars at the bank for gold coins and vice versa. 

 That time, the Great Britain has the power to control the world’s economy. Since the days of Golden Age era, many changes occurred in the world. Per capita growth has started to decreased rapidly. There also a big difference in some countries. In Western Europe and Japan, growth of per capita fell away in the appeal at the time of the Golden Age. But at the Asian countries that began to develop, the per capita growth faster than during the Golden Age period. 

The impact on Asian countries are beginning to rise significantly because of they were managed to mobilize and allocate resources efficiently and improve human resources to develop the technology and knowledge. However, on the other hand, there was a significant decrease occurred in Africa. There has been no progress in their per capita income. In Latin America, their income also only be a small fraction compared to the Golden Age era. 

The countries which the economy still dependent and based on Golden Age era, began to experience some difficulties since most of these countries still haven’t been able to adapt well to the condition of international economy that exist today that has changed from the days of Golden Age. 

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Understanding The Mercantilism

What is mercantilism? Mercantilism is an economic system where government take controls of foreign trade. It was close to realism system. It is very concerned with the aim to increase the assets and capital of a nation because the nation’s well-being was depend on import and export. It is important to note that they are trying to maximizing the net export.

It began on 16^th to 18^th century in Europe countries, Britain, Spain, and France.  On that time, the welfare of the nation was measure by how much the gold that it had.  And after that, the gold was used to build armies and navies, of course to protect the nation. The more gold they had, the more powerful they become. During the mercantilist period, it was not a surprise that conflict between two or more militaries of nation-state were happened more frequent.

Furthermore, mercantilist period was growing rapidly, especially in England. England applying free trade policies, prohibiting imports, and more of industrial revolution that happened there. Many things are invented there (Golden Age) making England became the dominant power in Europe. 

Credit: http://www.econlib.org/library/Enc/Mercantilism.html

             : http://www.economist.com/blogs/freeexchange/2013/08/economic-   history 

Irena Natasya-1701299185